ACT is calling for major cuts to Government spending and an overhaul of the tax system.

The party is launching its alternative budget this morning.

It's proposing $5.3 billion dollars in Government spending cuts while increasing military spending to 2 percent of GDP.

ACT Leader David Seymour told Mike Hosking the party wants a two-rate tax system, with a bottom rate of 17.5 percent for low earners, and a high rate of 28 percent for those who earn more.

“Cut taxes across the board, so for example if you’re a nurse somewhere in the mid-range at $70,000, you’d get $2300 back.”

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